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DOW and STI update 29th Dec 2011: On course for next leg down?

2011-12-29T10:43:00.006+08:00

DOW JONES
DOW has tried and tested 12300, but formed a reversal candle at the resistance. Last night's selldown in DOW was the confirmation candle.

Nearest support for DOW would be the 200MA at around 11950 to 12000. Next support would be at around 11740 level. A breakdown of that would see DOW back to test 11230.

Resistance level remains at 12300. A breakout of the level would see DOW testing their 6-month high of around 12740.

Short term: Turning Bearish
Mid term: Neutral, trading in a range
Long term: Slightly Bullish

STI
STI has failed to clear 2680 as well as the 20MA despite having a "Santa rally". Index remained weak as long as Bulls are unable to recapture 2680 level.

Near term support at rising window 2650, a more significant support for STI remain at 2600. A breakdown would then see STI test the recent low of 2520, formed in October.

Resistance of 2680 is proving a tough nut to crack, though if STI manage to break above 2680, it will also meet up will various resistance levels from 2720-2750, before testing the previous 'high' of 2790-2800.

Short term: Remains slightly Bullish, unless index breakdown from 2650
Mid term: Slightly Bearish
Long term: Remains Bearish

Noble Group: Gloucester Coal Ltd Proposed Merger with Yanzhou Coal.

2011-12-23T09:42:00.009+08:00

Gloucester Coal Ltd (Gloucester) has entered into a merger proposal deed (Merger Proposal Deed) with Yanzhou Coal Mining Company Limited (Yanzhou) and its wholly owned Australian subsidiary, Yancoal Australia Limited (Yancoal), following an approach from Yanzhou.

Noble's intentions
Noble Group Limited (Noble) has stated to Gloucester's independent directors that, subject to approval by the Noble board of directors and in the absence of a superior proposal, Noble intends to vote its shareholding in favour of the merger proposal and would elect to receive all ordinary shares as scheme consideration (that is, the option not including any CVR shares). Noble currently controls 64.5% of the ordinary shares in Gloucester.

Links:
http://info.sgx.com/webcoranncatth.nsf/VwAttachments/Att_011F582FA95A04BE4825796E007C5D65/$file/1063683.pdf?openelement

http://info.sgx.com/webcoranncatth.nsf/VwAttachments/Att_8E37421C127112E94825796E00561CA4/$file/PressRelease_ProposedMerger.pdf?openelement

Summary:
Noble has said that this merger is part of their long term plan, and that it is beneficial to shareholders of Glouchester and Noble Group. Being a major shareholder of Glouchester, Noble has stated that they will vote FOR the merger to go through.

Chart Analysis:
Based on the chart, Noble is currently facing stiff resistance at $1.25 level. The broken down gap between $1.28 to $1.60 doesn't look to be covered anytime soon as there're alot of previous support levels being broken by the gap down. The various levels are stated in the chart, and Noble would need alot of BULLS to overcome those levels.

Support for Noble currently holds at $1.10, followed by $1.05. A breakdown below $1.05 would send the stock tumbling down tremendously.

Stock in Focus: Wing Tai (13/12/2011)

2011-12-13T10:36:00.006+08:00

After the implementation of the ABSD (Additional Buyer Stamp Duty) last week, property developers took a hit and has been down almost every day since.

Wing Tai has since dropped from $1.07 on 7th Dec to yesterday's closing of $0.94.

I see this $0.94 as a support level, last seen in April 2009. At that time, WingTai embarked on an 8-month strong run to hit a high of $2.13 in January 2010.

Of course, with the ABSD in effect, property developers face an uphill task to generate profits for the upcoming financial work year. Do trade with caution.

Support: $0.92 - $0.94
Resistance: $1.00, followed by gap at $1.05-$1.10.

STI and HSI update 01/12/2011

2011-12-01T11:03:00.006+08:00

STI - Inverted head and shoulders?

STI looks to be forming a potential inverted head and shoulders formation, with the neckline at the major resistance level of 2900.

The immediate resistance for STI is at 2780-2800. Significant support would be in a range from 2680-2720, with a gap support forming at just past 2700 as of yesterday's close. The 50-days moving average remains flat, and is now at around 2730. The index could find some minor support at the level.

Short term: Bulllish
Mid term: Neutral with a chance of retesting 2900
Long term: Remains bearish until index manage to break 2900

HSI - more headwinds ahead

Similarly to the STI, HSI could be on the way to form an inverted head and shoulders too. Chartwise, HSI is weaker than STI as the neckline of the formation is tilted downwards, meaning HSI could find it tougher to breakout of the neckine at around 19650.

In the case of a breakout of 19600, next resistance for HSI would stand at around 20200. Immediate support at HSI is now back at 18900. This level is very crucial to HSI it can act as a springing board for HSI to breakout of the H&S formation. Similarly, a failure to hold the level would see HSI back down towards 17600, and if 17600 fails this time, we could see HSI test October lows of 16200.

Short term: Bulllish
Mid term: Neutral, with limited upside capped at 19650
Long term: Remains bearish until breakout of 20200

STI Weekly Chart 09/11/2011

2011-11-10T15:05:00.002+08:00

Long term trend in STI remains down, as show by the previous 3 weeks' candle. Failed to convincingly clear above the downwards-slopping 20-week moving average.

Resistance for STI remains at just-broken-down level of 2790-2800. The BULLS has shown weakness for the past few trading sessions as they didn't manage to clear above the 2900 resistance level.

Minor support at around 2750, which is the 50-days moving average on the daily chart. A drop below the low of the last bullish candle at 2744 (as shown on the chart) would be a psychology blow to the BULLS. Next support would be around 2680-2700 level. Failing to stay above the level would see us testing 2600 again.

Short term: Turning Bearish
Mid term: Neutral with chance of downtrend resuming.
Long term: Remains bearish, chance of trend reversal now minimal.

STI update 31/10/2011 - Index hitting crucial resistance

2011-10-31T10:54:00.002+08:00

STI is facing tough resistance at major 2900 level after a strong rebound.

Short-term trend is still up, but we must always bear in mind that nothing should go up or come down in a straight line. So, in order for the short-term uptrend to continue, STI will need a retracement from current levels.

STI currently has a soft support at around 2860 level, a retracement to that level is welcomed. In fact, a retracement all the way back to 2800 level is still considered a healthy retracement.

However, do take note that 2800 level must hold for the BULLS, as a breakdown below that level could put the BEARS into play again.

A breakdown from 2800 could see next support at around 2720 level, whereas if the STI breaks above 2900, 3000 is the next major resistance.

Short term: Cautiously bullish, awaiting a retracement
Mid term: Bullish
Long term: Still bearish, but with a chance of trend reversal.

STI update 13/10/2011

2011-10-13T10:42:00.003+08:00

STI is on a strong technical rebound after a heavy selloff. On the daily chart, it looks set to test 2790-2800 resistance level.

On the weekly chart, a reversal candle is on the verge of confirmation due to this week's strong rebound. A rally to test the initial breakdown level of 2900 looks to be well underway.

However, long term trend is still down. STI should be heavily resisted at 2900 level. A trend reversal can only be considered if STI miraculously cleared above 2900.

Short term: Bullish
Mid term: Slightly Bullish
Long term: Bearish

STI Weekly Chart 03/10/2011

2011-10-03T10:56:00.002+08:00

STI has broken down below the 2700 level of support I stated on my last post. Downtrend has resumed after a short technical rebound. In fact, at the time I am writing this post, STI has also broken the previous low of 2627. It remains to be seen if we can hold this crucial level of support by the end of the trading day. Failure to hold the level would add further downward pressure to the index.

From the weekly chart, we can derive the next support for STI at around 2530 level. Failure to hold that would see 2420, followed by around 2240.

The previously broken down level of 2680-2720 would now form the resistance level for STI.

Short term: Bearish
Mid term: Bearish
Long term: Bearish

STI update 20/09/2011

2011-09-20T12:02:00.005+08:00

On 8th August 2011, STI has broken down the crucial 2920 support level, which has held in 2 occasions (in August 2010 and March 2011). Thus, STI is now in a DOWNTREND.

Immediate support looks to be at around 2680 to 2720, which was tested 3 times on 11th Aug (2720), 22nd Aug (2680) and 14th Sept (2704).

STI looks to be resisted at around 2800 level in the near term, and to negate the downtrend, STI would need to clear above the previously broken down level of 2920.

Market seems to be in a prolonged consolidation mode amidst the uncertainty over the European debt crisis. 20MA is flat after a strong selloff last month, but the 50MA, 100MA and 200MA are all still trending down.

Short term: Neutral
Mid term: Bearish
Long term: Bearish

Chances of a base forming and reversal to uptrend above 2920: 10%
Chances of a breakdown to continue the downtrend to below 2700: 90%

Market Update 04/04/11

2011-04-04T12:16:00.003+08:00

STRAITS TIMES INDEX

I had mentioned on my last update on the STI that it needed to clear above the crucial 3120 resistance level in order to negate the BEAR trend.

The Index closed at a conincidence 3120 level last Friday after briefly broken up earlier in the day. Today, the Bulls continued to march, and the Index is now facing a small resistance at 3140, the 100-days moving average (SMA).

A push above the 100d SMA would mean that the next resistance would be at 3180 to 3220. However, do expect some profit taking to take place after a 3-week strong rally to current levels.

Support for the Index would now be at the crucial 3120 level.

Short term: Bullish
Mid term: Turning Bullish
Long term: Neutral

HANG SENG INDEX

HSI staged a remarkable reversal since my last update. I had mentioned that HSI needed to remain above 22400 level to avoid slipping into a downtrend.

Indeed, since that day, the Index had embarked on a remarkable 1600-pt rally to the 1st immediate resistance of 24000, which I also mentioned in my previous update.

HSI is now trading slightly above the resistance level, and could be set to test the next level at around 24400.

If this Bull run is to continue, HSI should find good support from 23800 to 24000 level for some consolidation, before charging up again.

Short term: Bullish
Mid term: Bullish
Long term: Turning Bullish

DOW JONES

Nothing much has happened to the DOW since my last update.

As expected, consolidation took place, and it seems that the Index had no problems holding out the crucial 12000 support level.

In fact, the Index is now on the verge of breaking past the recent high of 12400.

As breakout would indicate a bullish target of around 13100.

Short term: Bullish
Mid term: Bullish
Long term: Bullish

Update HSI 17/03/2011

2011-03-17T10:21:00.004+08:00

A possible breakdown for HSI from a top formation crucial support of around 22400. It gapped down below the support level and it remains to be seen if it can close above the level today.

Upon breakdown, the ultimate breakdown target would be around 19800, although 21000 could also offer some support.

Nevertheless if the index can close and stay above 22400, the 1st immediate resistance could be see at around 24000 (the high formed on the 9th March 2011).

Short term: Bearish
Mid term: Bearish
Long term: Turning Bearish

Update on Regional Indexes 08/03/2011

2011-03-08T18:01:00.012+08:00

STRAITS TIMES INDEX

STI has broken down the previous crucial support of 3120 on 10th Feb 2011, with a breakdown target of around 2900.

It has since rebounded off 2970 and is currently testing the support-cum-resistance level of 3120.

The view I have been telling my clients ever since the breakdown, is that as long as the Index does not break above 3120, I will remain BEARISH with a minimum STI target of 2900 (it might really go below that level).

Short term: Bullish
Mid term: Bearish
Long term: Bearish

DOW JONES

DOW has by far been the strongest market for the past 3 months, with the index at its highest level since mid-2008.

There's a bit of consolidation phase going on the past sessions, pending the next big move.

Support will be at key level 12000, a breakdown from there will see some support at around 11450.

Resistance is at the recent high of around 12400.

Short term: Neutral
Mid term: Bullish
Long term: Bullish

Shanghai Index

SSE is short-term bullish after breaking out from 2950 level and also the psychological 3000 level.

Next significant resistance would be at 3160 to 3170 level.

Short term: Bullish
Mid term: Turning Bullish
Long term: Neutral

Hang Seng Index

About 2-3 weeks ago, HSI was similar to STI, and is looking like a Bear market. But ever since, it has shown quite remarkable recovery.

Take note that the short term moving average (20 MA) is showing signs of turning up.

Resistance now will be at around 24400, followed by recent high of 25000.
Breakdown level would be around 22400 level.

Short term: Bullish
Mid term: Neutral
Long term: Neutral

Sorry for the lack of updates for the past year, will try to keep this blog alive. Lastly, I wish all of you HUAT BIG! during this Rabbit Year!

KepCorp leading the charge.

2009-07-25T14:31:00.001+08:00

This is my one of my money-spinner for the past 2 weeks. Target remains unchanged, with proper trailing stop in place.

US Market Outlook (Week ending 24th July 2009).

2009-07-25T13:04:00.005+08:00

DOW has set a new high for 2009 as it closed at 9093 last night, 5 pts above the previous high of 9088 set in early January this year.

DOW has broken through 8880 resistance earlier this week, and looks set to head for 9600s level.

DOW will now find some strong support at 8880.

S&P 500 has broken the neckline out of the inverted head and shoulders formation at 950.

Next resistance will be at around 1000, set in November last year.

Support will be at 950 level, the resistance-turned-support.

The Nasdaq has closed the gap between 1900 and 1950 (set in October 2008), and the next significant resistance will be at 2080 level.

The closing of the gap meant that 1900 will provide some strong support.

HSI and STI update. (20th July 2009)

2009-07-20T18:22:00.003+08:00

HSI gap up at resistance level today and rallied into new highs for the rest of the day. A sign of continuation of the BULL RUN. 20400 would be a tough resistance to crack.

STI has broken into a new recent high of 2424, and looks set to be heading to next significant resistance level of 2600, last seen in September 2008.

Support and Resistance for STI, HSI, DJIA.

2009-06-24T12:16:00.005+08:00

STI update. (10th June 2009)

2009-06-10T09:45:00.004+08:00

Even though we have the signs of an initial bull run, I believe STI is on the way to a significant correction, unless we have some BIG buyers (fresh funds) coming into the equities market.

Resistance set at previous high of 2424, with 1st immediate support at 20MA at around 2283. I don't rule out STI correcting all the way to 2121 and even 1950, depending on how deep the correction is.

Trade with caution, do not buy at resistance. Wait to pick up on a cheap at support levels.

STI Weekly Chart (End 15th May)

2009-05-17T22:55:00.004+08:00

The STI weekly chart shows a healthy retracement (to the 50-week MA) after a tremendous 350 pt rally last week.

Immediate Support at weekly 50MA, whereas immediate Resistance will be the high we set last week. Remains to see if we can clear new high, or do we go back to the 1950 level of support.

Despite the bad economic situation we're in, remember that the stock market has always been forward going. Please do not underestimate the power of this rally, as it hasn't shown any signs of it's over yet. Until then, I'd choose to hold back any plans of initiating a short position.

STI Update 5th May.

2009-05-06T00:37:00.001+08:00

Resistance: 2220
Support: 200MA, followed by 1950.

Closeup on STI during SARS outbreak in 2003.

2009-04-28T11:02:00.003+08:00

STI found a bottom at 1205 on 11th March 2003, shortly after Singapore announced it's been hit by SARS. Market rallied over 10% and tested a resistance of 1340 twice in late March and early April, before forming another low at 1225 by the end of April. It did tested 1340 again by mid-May and retraced to form a "higher low". STI finally breakout of the 1340 resistance on 29th May 2003, and the rest is for all to see.

As shown in my chart, chartists will see a very familiar chart formation here. Double-bottom, coupled with a inverted Head and Shoulders, with the "Head" also being the 2nd "Bottom" of the main trend, with the 1st "Bottom" at 11th March 2003. Do take note of the increased in volume when the index breakout of the formation on 29th May 2009.

It's been widely said that in History, every recession will end with either a war or an epidemic. So, could the Swine Flu be an indication that a new BULL is about to be born soon?

For more info on SARS, click here.

Is SARS a guide for the economic impact for Swine Flu? Click here.

Wilmar - Homerun trade?

2009-04-23T16:09:00.005+08:00

Resistance: 3.59, 3.88.
Support: 3.31.

Where is the markets heading?

2009-04-05T22:04:00.002+08:00

With the recent run-up of the market, let's have a look at the possibilities the markets is heading to.

DOW is currently resisted at 100MA, and a breakout of that could see DOW going to test January's high of 8375. A significant support could be at around 7485.

HSI broke out of Feb-09's high and could be on the way to test Dec-08 and Jan-09's high of 15780. Support is at the recent breakout of 13900.

STI broke 1780 resistance at the 2nd attempt, and looks set to test 1940, which is set on the first week of 2009.

The Fibonacci study shows bullish signs after the index retraced to 61.8% after the first test of 1780. The Fibo levels 1857 and 1942 forms significant resistance, coincides with early Jan-09's levels.

DOW and HSI

2009-03-18T13:54:00.003+08:00

DOW formed a topping candle on Monday 16th March, but the pattern failed as DOW continue its rally last night. With triple-witching coming this Friday 20th March, likelihood is that the market should sustain the past week's gains at least until Friday.

History is also on the bull's side as it shows that for the past triple witching sessions since 2006, the market will rally the previous week prior the day.

HSI shows a similar candle to the DOW yesterday, and from the time of this post, it looks like it will invalid the formation too.

Chances of a continued rally? But till when? At least until Friday I feel.

Ascendareit - Possible Short?

2009-02-20T12:14:00.002+08:00

Price at near downtrend channel resistance. Cut loss sets at break of $1.30, the recent high which coincides with 20MA. Likely profit targets at $1.16 and $1.09.

CoscoCorp and KepCorp on the Reversal?

2009-02-05T11:23:00.006+08:00

Bullish signals has appear in two of the most bearish counters since the start of 2009. Could it be the start of a magnificent reversal?

Key Levels for Capitaland, Cosco & KepCorp

2009-01-29T09:52:00.008+08:00

In addition to the price action levels, do take note that the 20MA and 50MA also acts as resistance for the above charts. This market is rather hard to trade in the near term, so if you decide to jump in, be it Long or Short, practice strict Money Management. Otherwise, staying sidelines is also an option.

*Please also note that Capitaland has a rumour of rights issue at $2.20. Limited downside if this rumour turns out to be true. This is because at low price, it would not be attractive for investors to subscribe for the rights.

HSI and HSCE

2009-01-15T10:14:00.004+08:00

*Note: HSCE (Hang Seng China Enterprise Index) basically shows a more close relation to our S Shares than HSI.

STI Closeup.

2009-01-15T09:45:00.003+08:00

STI is on the way to test a key support at around 1710. A breakdown from this level would trigger many short selling, and we could see STI test 1570 pretty soon.

A break below 1470, and we're off to test my predicted 1200 level, which I posted last year.

End of Obama and CNY rally? 1710 must hold first.

Bullish Breakout Broadbase!

2009-01-05T23:47:00.005+08:00

As written in my previous post, STI broke out of the triangle formation in the very first week of 2009! Congrats to all who had positioned themselves for this! :)

Another good take today was KepCorp. It gapped up on opening to $4.60 resistance level, and went on to break several resistance! No turning back for this darling!

Potential target $5.45, followed by max $5.62. Worth a try if it retraces to near $4.87 tomorrow.

Other counters worth the watch:
1) Noble ($1.11 ideal entry)
2) Ezra (closed at resistance, buy on retrace, minimum target around $0.81 to $0.85 if break resistance)

*Please note that entries after today carries a higher risk level, and rewards are not as fantastic as before. But there's still money to be made if you're nibble. Good luck!

STI Outlook.

2008-12-26T10:42:00.007+08:00

STI has been trading in a triangle formation since end of October 2008.

Judging from the time of the year (Budget 2009 and CNY nearing), I'm tilted towards an upwards breakout of the formation, possibly as soon as the 1st week of 2009.

Note that the weekly STI chart shows a very healthy momentum to this market.

Immediate Support at 1710. A breakup of the triangle formation sets the first Resistance at around 1930, while a breakdown continues our downtrend towards my percieved 1200 level.

Using Moving Average Crossover to determine uptrending stocks.

2008-12-21T22:20:00.011+08:00

One of the most common way to define whether a stock has reversed into an uptrend, is by using the Moving Average (MA) Crossover.

Using ChartNexus XpertTrader, I screened out these stocks that has their 20-days MA crossing over 50-days MA.

For the past 3 weeks, I have noticed that more and more counters are having such a syndrome. The counters listed above are some of the counters "taking the lead" to recovery.

It is also interesting to note that in the case of Midas and Wilmar, both their 50MA is already trending upwards. These 2 counters already has their MA crossover since 3 weeks ago.

So, how do we trade uptrending stocks?

A typical uptrend stock will find a higher low and higher high. We should look to buy on dips onto support. Do not chase the price as you never know when the stock is going to retrace, especially after a massive move for the past 3 weeks.

Also, we should not negate the fact that the main trend is still down. The global economy will most likely face more stress in 2009, and the good old days won't be coming back to us in the near future.

* This analysis is based on shorter term MA crossover using 20d and 50d MA. Do note that the longer term MA (100d, 200d MA) are still way above current levels and trending downwards.

Cosco Breakout!

2008-12-10T11:42:00.004+08:00

Cosco breakout of ranging channel. Upside capped at $1.30. Past Resistance at $0.935 has turned to Support now. Can try to buy on dips.

HSI in Focus

2008-12-09T23:55:00.004+08:00

HSI looks to have formed a "higher low", and on the verge of testing the previous "high". Good momentum in the global markets for the past couple of weeks. Yes, we could be in for a end-of-year rally. Cheong ah!! :)

Chart of the Day - Noble.

2008-11-27T12:05:00.003+08:00

Yesterday would be the best day to enter, but I missed it out. It only caught my attention today, but better late than never right?

It's looking good for a quick trade. Just hit and run, not for keeps!

Cheers to those who followed the call. :)

Chart of the Day - Wilmar.

2008-11-26T12:27:00.004+08:00

Key findings:
Stock price is up despite XD ($0.028) today.
20MA is trending up, and cuts above 50MA.
MACD showing signs of reversal, Stochastic coming up from oversold.

Support (Stop): $2.27
Resistance (Profit Target): $2.81

Poll Update.

2008-11-20T14:22:00.004+08:00

Earlier this year when I started this blog, I put up the exisiting Poll: "Where will Straits Times Index be at the end of 2008?"

The results so far shows me this:

Below 2000
2 (15%)
2000 to 2499
1 (7%)
2500 to 2999
1 (7%)
3000 to 3499
5 (38%)
3500 to 3999
2 (15%)
4000 and above
2 (15%)

Amazing statistics shows that only 15% of the voters predicted correctly that STI will end the year below 2000, the same number who thinks that STI will cross 4000!

What does this tell you? Well, this goes to show that the majority most probably lost money in the stock market for the past 1 year.

I have to admit that it's not an easy time for retailors to trade in this current market, especially those that have been through the bullishest of times last year. It's not easy to convince yourself that the BULL is over, and it'll take some time for you to realise that it's the BEAR that rules now.

StraitsAsia Outlook

2008-11-19T09:58:00.001+08:00

A typically bearish counter.

Trading the Bull in a Bear Market.

2008-11-10T22:09:00.006+08:00

As what I had analysed in my previous post, we had indeed seen a short-term rebound in the past week.

And with the announcement of China's 4 trillion yuan ($586 billion) stimulus package yesterday, Asian markets soared today.

There seemed to be some good momentum in the markets for now, and I think that there's still some upside in the short term. But please be very clear that we're still in the bear market.

Hold back on initiating any short positions for the time being, and be very vigilant if you're going long.

Chart of the Day:
Kep Corp

DOW in the near term.

2008-10-30T09:57:00.003+08:00

DOW could stage a short term rebound to 10300 level if it can break the 9270 level immediate resistance. But 10300 could be too strong a resistance for it to break.

Support set at around 8140 level, and a break of that will see us heading towards 7200 major support (which i eventually foresee will happen).

Any entries should be cautious.

The Animals of the Financial Markets.

2008-10-24T23:03:00.003+08:00

I believe that most of us already know the 2 most famous (or infamous) animals of the market, namely the BULL and the BEAR.

And some of you might also have heard about the CAT. Dead cat that is.

Well, I was surfing Investopedia today and was linked to the discovery of more animals to add to this "animal kingdom", namely:

PIG - An investor who is often seen as greedy, having forgotten his original investment strategy to focus on securing unrealistic future gains. After experiencing a gain, he often have very high expectations about the future prospects of the investment and, therefore, do not sell his position to realize the gain.

Like a pig in the farmyard that overindulges in feed, this type of investor will hold onto an investment even after a substantial movement in the hope that the investment will provide even greater gains.

OSTRICH - A slang term given to market participants who ignore important pieces of information or situations, which have the ability to impact them or the market in which they operate. The reasons behind type of action can include risk aversion and bias.

The investment term is derived from the similarities between investors and these large birds, where in response to a dangerous situation, they stick their heads in the ground. These participants will ignore the market at all costs when it is not working to their advantage, in effect sticking their 'heads in the ground' in response to the stress of the market.

SHEEP - An investor who lacks a focused trading strategy and trades on emotion and the suggestions of others, including friends, family and financial gurus. This type of investor often makes rash investments without first determining whether these decisions are financially viable. The behavior of sheep contrasts with that of bulls and bears, who have focused views about the market.

Like a sheep, they are followers, relying on a shepherd for guidance. These shepherds can come in the form of financial pundits or the latest trend or market story.

Sheep-like investors are often the last to get in on a major market move, because they base their investments on what is being talked about the most. They are also the most likely to sustain investment losses because they have no clear investment strategy.

Interesting isn't it? So, which animal are you?

Where is the Bottom?

2008-10-18T14:08:00.007+08:00

With the worsening economic conditions, the global markets were getting slammed in recent weeks. Here's my analysis on the possible "bottoms" on the various markets.

Support: 7200
Resistance: 10700

As shown in the chart, DOW broke down of the primary uptrend channel last month, and could find strong support near 7200 last seen in October 2002. The fall over the last month was drastic and extremely volatile. Never had DOW seen triple-digits swings in more than 80% of the sessions last month.

Resistance capped at 10700, as I cannot see DOW breaking past it anytime soon.

Support: 1700, if broken 1200.
Resistance: 2600.

With Singapore announcing that we're already in recession, our STI looks set to test 1700 soon. And if there're more bearish news in the next few months, we could see the 1200 level, bottoms set in September 2001 and early 2003.

Likewise to DOW, I don't expect STI to cross resistance at 2600 in the near future.
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By the way, my long-awaited trading representative license is finally here! I should be able to start work as a remisier next month. So, if anyone is interested in opening a trading account with me, please drop me a mail at zhihao@cyberway.com.sg. Thanks!

Where is USD heading?

2008-09-23T14:12:00.007+08:00

The EURUSD and GBPUSD daily chart shows that USD continues to weaken against EUR and GBP.

However, take note that there will be resistance near 50% fibonacci, which conincides with the 50EMA (in navy blue) of both charts. Following the sharp retracement off the previous downtrend move, USD will likely consolidate around these levels, before it decides on a move towards 61.8% level, or to continue its downtrend move.

Given the US Fed's actions in recent weeks, I'd favour USD to continue to weaken, possibly testing the 61.8% fibo level. However, I'll be cautious of the European economies as well. When our Big Brother doesn't do well, nobody can be assured their economy is sound. And if the ECB (European Central Bank) or BOE (Bank of England) decides to cut rates, EUR and GBP will suffer.

STI Outlook - National Day Rally?

2008-08-05T21:15:00.010+08:00

It was an amazing day today, with extreme volatility throughout the day. With the Dow closing almost flat (-40pt) last night, STI opened slight positive today. But we weren't able to hold onto any gains ahead of the FOMC tonight as selling soon kicks in. By lunchtime, we were very deep in the Red. STI even broke the recent July's low of 2819 pt. HSI and SSE weren't any better as there were broadbase selling all over Asian markets. Nikkei gave up their gains, and HSI and SSE continued to fall.

When all seemed to be doom and gloom, STI staged a remarkable recovery with only about 1 hour left to go. HSI closed in deep red, HSI futures but showed some signs of recovery in post-market trading. STI recovered from the day's low of 2807 to close the day (down -15pt) at 2860 pts. What an amazing recovery!

Tonight's FOMC meeting should most likely see the Fed keep rates unchanged. Read more about this event here.

Today's move in STI could signal a possible short term reversal in our market for the next few days (could be the national day rally many had hope for). STI formed a Hammer on significant high volume today. It could be the capitulation move at the end of a downtrend.

But remember, we're still trading within the downtrend channel since May (refer to chart). So, unless we break the near term resistance (31st July high of 2960) with conviction, it won't be long before we test January's and March's low of 2745.

Stock picks for the run:
With few counters being spared by the selldown today, the stronger ones are those that will run the furthest when the market rebound. I noticed strength in some counters today:

SGX (closed green)
Sino-Env (closed near high for 3rd day running)
Li Heng (came out with good results aftermarkets, due to issue $0.015 dividend)
Synear (held up very well in today's market condition)

Ready for Rally?

2008-07-21T23:52:00.006+08:00

Sorry guys, I've been busy with my staffs and couldn't find time for the updates. Nevertheless, I shall do a short post now.

The market has finally kicked off what could be a promising rally today. Last Friday's move could be the capitulation move to drive out all weak holders, and today's move could have killed off any shortists from last Friday.

DOW has been up almost 600pts from 3 days, and it is expected that we see some consolidation in the next few days. A consolidation is a good sign, as the Bull needs to rest too. A charging bull will only die fast. In fact, with the options expiring day and a weekend ahead, people had already expected DOW to retrace last Friday, thus the selloff in Asia on last Friday afternoon. The unexpected 50pt climb caused our market to gap up today, and kicked off a potential rally.

The Blues were leading the way today, as seen on past rallies. Historically, rallies will always start off with the Blues, then followed by the other smaller caps. As usual, SGX is the crazy horse that can go berserk either way the market goes. A counter for the brave, and not for the mild hearted.

I've attached 2 of the many interesting charts. Note that this is not a recommendation, and any entries should be of your own decision.

A double-bottom would be formed at neckline $4.40, conincidentally the 100MA.

A breakout from the neckline would see the target set at $4.80.

200MA resistance set at $4.51, with gap resistance (11th June) at $4.56.

ST Engg broke out of its downtrend channel today.

Immediate resistance at $2.73 (20MA). Will be looking to "return home" to the 50MA which it "left" since 29th April.

Other interesting counters:
SGX
City Development
Capitaland
China Hongxing
Li Heng

City Dev could be setting up for a run-up, but like SGX, is another counter with wide spread intraday.

Hongxing and Li Heng looks to be the first to run should our S Shares start off their rally.

Weekly Recap (7th-11th July)

2008-07-13T22:30:00.002+08:00

Trades Done:
Jardine C&C $15.72 in, $15.94 out. (+1.4%)
Sinotech $0.55 in, $0.56 out. (+1.82%)
Singtel in $3.54.
USDJPY short 107.20, 106.15 stopped out. (-105 pips)

Key Events:
1) Financials were the hot topic this week, with Freddie Mac and Fannie Mae are facing more pressure from the subprime issues.

2) Oil retraced more than $11 to below $135 level by mid-week, but once again broke new historical high ($147.27) again on Friday's intraday trading. It closed the week off the high though ($144.41).

3) High oil price also meant a weakening USD.

Evaluation:
1) The USDJPY trade I took on Friday evening was meant to be a slightly longer term trade than my usual scalping. Unfortunately, with the Oil price back at record highs on Friday, I was stopped out of the trade.

Market Outlook:
Another week of uncertainty, Dow has yet to confirm its direction. With the whippy market condition, it's best to stay sidelines till the direction is clear. Any positions should be kept small, and stops should be closely watched.

*Will update some charts later when I have the time.

Weekly Recap (30th June-4th July)

2008-07-08T20:28:00.008+08:00

Trades Done:
Marco Polo $0.38 out. (-11.6%)
SPC $6.82 out. (+3.18%)

Key Events:
1) Oil broke new record highs once again ($145.58 on 3rd July) on weakening dollar.

2) On Thursday (3rd July), ECB announced that they are less hawkish on inflation, and hinted that they would not be raising rates further in the near term. EURUSD fell hard upon the ECB press conference despite a series of poor US data (Nonfarm Employment Change, Unemployment Rate, Unemployment Claims) all coming in at the same time. The speech really caught alot of forex traders by surprise.

3) US was closed for a long weekend. (Half day trading on 3rd July, and closed for Independence Day on 4th July.)

Evaluation:
1) Entry for Marco Polo was a mistake right from the start. (refer to my previous week's recap)

Market Outlook:
With the ECB not committing to raising rates further, we could see some strengthening of the dollar, especially with US Fed speaking on raising rates themselves. EURUSD will likely see further falls after being in overbought region for long periods before this announcement.

The strengthening of the dollar against the euros would therefore lead to a "supposedly" lower oil price (omit the factors of speculation). When oil finally comes down, I reckoned that it would be quite a major correction. This is because of the massive amount of speculative plays involved in the recent surge in oil price.

And if oil price really comes down hard, expect the overall markets (led by the Dow) to recover some of the lost ground in the following weeks to come.

However, for the Dow to start rallying, we still need 2 other factors.
1) USD to strengthen against other currencies.
2) Financials to be up (or at least stable).

Have we got that now?

Weekly Recap (23rd-27th June)

2008-06-28T20:03:00.008+08:00

Trades Done:
China Energy out at $0.46. (-6.12%)
USDCHF shorted $1.0405, covered $1.0385, $1.0370. (avg +27.5 pips)
Mercator out $0.48. (+2.12%)
Mercator out $0.47. (-4.08%)
Marco Polo $0.43 in.

Key Events:
1) Goldman Sachs downgrade of Citigroup, sending Dow to a new 52-week low on Thursday.

2) Fed kept rates unchanged at 2 percent, somewhat predictable.

3) Oil hit a all-time record high of $142.99 this week, and closed $140.21 on Friday. Dow continued to fall after Thursday's crash, due to the rising oil.

Evaluation:
It has not been a very good week for me.

1) Took abit too long to cut CE, even though I had stated in my weekly recap last week that SSE has failed to reverse. But I'm glad I still cut it, as it has fallen quite a fair bit off my cut price.

2) Was indiscipline in jumping the gun at Marco Polo, despite me stating the support at $0.40 just hours before the market open! I was overcomed by emotions when I saw the huge buyups within the first few minutes of Thursday's market opening, and didn't want to miss a potential run. Gave in to greed, I'd put it.

Lesson learnt: Believe in the charts, Hope doesn't bring you anywhere.

Market Outlook:
After a series of losses, I decided to take a step back and look at the bigger picture again. And this is what I get.

I guess I do not need to explain too much on the 3 weekly charts. I think it's quite obvious already. Now, let's take a closer look at the Dow daily chart.

So, with Dow breaking down from the "already-very-steep" short term downtrend channel, it has now moved into the main downtrend channel.

Note that it has broken yet another fibonacci support level (38.2%) since Thursday. The next fibo support will be at around 10800 pts (50%). That's only 500+ points away! And with oil prices keep breaking new highs, we could see this support hit sooner rather than later.

Once again, I shall say that unless Oil undergoes a major correction (hopefully), we will see more downside to this market. Trade with caution!

Interesting Marco Polo?

2008-06-26T01:09:00.007+08:00

Marco Polo has been on an solid uptrend since 29th April when it closed above the 100d MA. It never looked back since, until 12th June when it broke down from it's secondary uptrend line, and went on to a consolidation period.

It found support at $0.385/39 level for a few days, before finally bouncing off the bottom of the primary uptrend channel line yesterday (24th June).

Chartwise, it's very bullish, with the price above all MAs shown in the GMMA. The MACD cuts above zero, and on notable high volume too.

Stong support is at $0.385/0.39 level. Nearer term support resting at $0.40 (trendline support).

Resistance will be at $0.445, which coincidentally is its debut opening price back in 5th Nov 2007.

It needs to clear the tricky resistance at $0.445 to resume it's uptrend.

Other interesting picks:
CDL HTrust
UE (might not be ready yet)
Hyflux (Short?)

Weekly Recap (16th-20th June)

2008-06-22T11:29:00.004+08:00

Trades Done:
SPC out at $6.61. (+3.12%)
SPC $6.61 in. (CFD)
Oceanus $0.40 in, $0.417 avg out. (+4.25%)
China Energy $0.49 in.
Mercator $0.47 in.
Mercator $0.49 in.

Key Events:
1) Wednesday (18th June), Shanghai index (SSE) performed a potential bullish reversal after a long downtrend. It closed up 147pts from 2794 to 2941. Our FTSE China shares were bullish right from the start, on good volume too. Seems like everyone has switched to bullish mode.

2) Thursday (19th June), SSE performed an abrupt U-turn, and fell 193 pts to 2748 due to the consistent high oil price. It caught everyone by surprise, though it must be noted that the fall of our FTSE China shares was on thin volume, meaning people still habouring hope of a reversal. Later that night, the Chinese government announced to raise prices for fuel by as much as 18% in a move intended to cool the nation's surging energy consumption.

3) Friday (20th June), SSE did a Rickshawman (long-legged doji) candle, a sign of indecision of where the market will go.

Evaluation:
A confirmation is needed in the next day of the potential reversal candle, which SSE has failed to do so. This could lead to a continual drastic fall to the China stocks, as there were many stale bulls being trapped on Wednesday, given the exceptionally high volume buy ups.

Market Outlook:
Weakness will continue as long as the oil price keep testing new highs. Even there's talks of the oil price facing a major correction soon, there's still no signs of oil price coming down as yet. If oil price doesn't correct soon, I think we would be seeing a gloomy next few weeks ahead.

However, the school holidays are over. And with Euro2008 ending soon too, we might be seeing an increasing interest back in the market by the next few weeks.

Weekly Recap (9th-13th June)

2008-06-15T23:09:00.003+08:00

Trades Done:
USDJPY 107.57 in, 107.71 (avg) out. (+14 pips)
USDCHF 1.0469 in, 1.0439 stopped out. (-30 pips)
Short Indianbull $0.925, covered $0.93. (-0.54%)

Key Events:
1) It was a very quiet week for me, as I didn't get into any trades, only a small punt in shorting Indianbulls after lunch on Friday. Reason for shorting Indianbull is not in anyway related to TA, since it only made its debut on SGX on Wednesday. I shorted it because of the extreme low volume in the morning session - only less than 300 lots done.

2) Learnt and practiced a new trading technique on 1H chart on forex. But I will need to do more trades to test this technique to see if it gives a high ratio of returns in the long run.

Evaluation:
The one lesson I learnt from Indianbull is that nowadays, new IPO counters might be easily manipulated by syndicates, where we wouldn't know what is their next move. Termed risky counter to touch.

Market Outlook:
With DOW's rally on Friday, we are likely to see a gap up on STI on Monday, especially given that Dow Futures was trading mostly in the red on Friday, causing counters across the board to be sold down near our close.

However, I believe the gap up would not mean that we're set up for a rally. In fact, I think the market is too weak now to sustain any gains.

Despite this, I'm still holding onto my long position on SPC. Chartwise, it signals a reversal from its downtrend, and I remain optimistic on it.

Weekly Recap (2nd-6th June)

2008-06-08T18:34:00.009+08:00

Trades Done:
Swiber $2.86 in, $2.82 out. (-1.4%)
Mercator $0.522 in $0.55 out. (+5.36%)
Sino-Env $1.82 in.
SPC $6.41 in. (CFD)

Key Events:
1) The Sino-trade. Refer to my previous post.

2) After the lesson in the Sino-Env trade earlier in the week, I am glad that I am disciplined enough to put a stop on Swiber. Swiber fell below the support level, and negated my reason for entering.

3) Bought SPC upon rebound from last Fibo support of $6.36 the previous day. Got in near the opening at $6.41. Immediate resistance at $6.72, as shown by 50% Fibo and downtrend channel resistance.

4) Missed out on shorting Semb Mar at $4.62 when it dropped 1 bid when I was about to enter my orders. Waited for it to come back up, but sadly, it never did.

5) Missed out on shorting City Dev at $11.32 near closing too. But due to the uncertainty since it's a Friday, decided to give it a miss.

Evalutation:
Lessons learnt this week once again reflect truely on this statement.
Plan Your Trade, and Trade Your Plan. Fail to Plan = Plan to Fail.
Always remember this.

Market Outlook:
Dow crashed 394 points on Friday, due to Oil spiking a record rise of $11 in a day PLUS the biggest gain in unemployment reading in more than 20 years.

STI will most likely have a big gap down on opening on Monday. And with HSI not open, we would probably take the lead from Nikkei from then on.

Mercator Jackpot!

2008-06-05T00:30:00.014+08:00

Entered Mercator on Monday at average price of $0.522. Planned to cut loss if it drops below $0.50 (as mentioned in the Cbox), and also add positions if proven right.

It wasn't moving much until this afternoon, when it announced a new COA contract with Indian Conglomerate, TATA Group. Bingo! The news shot the price up after lunch and it broke past the previous high of $0.575 set on 20th May. It went to a high of $0.595 before closing at $0.57.

I expect more upside for this counter, and will only look to sell when I detect weakness in it.

______________________________________________________________

Ok, now for the bad trade - Sino-Env. Entered yesterday at $1.82, and set a stop loss at $1.77. It didn't get triggered yesterday, and went on to close at $1.85.

But today, Sino announced the issuance of a new Innovative Convertible Bond and the stock price was sent crashing after the opening bell. I'm not sure how this new innovative will affect the stock price, but it seems like investors didn't like it.

And I am utterly disappointed with myself, for FAILING TO CUT LOSS at the designated exit! Once again, I am not disciplined enough to trade my plan, and I paid a price for this. Sino-Env closed a low $1.71.

______________________________________________________________

Interesting pick for tomorrow?

Swiber bounced off the lower trendline of the uptrend channel today, and closed at 38.2% Fibo resistance of $2.92 today.

A possible entry would be upon the clearing of $2.92 resistance, and cut loss would be at breakdown of the trendline at $2.85, or 50% Fibo support at $2.83.

A break above $2.92 will see it test resistance at $3.04, followed by $3.23.

Stochastics turning up is another indicator to support the analysis.

_____________________________________________________________
Alright, with Dow now trading at +48pts (1:37am), we should expect to see some GREEN tomorrow. Cheers and good night!

Weekly Recap (26th-30th May)

2008-06-01T11:18:00.003+08:00

Trades Done:
ChinaNTown $0.215 in, $0.21 out. (-2.33%)
NOL $4.01 in, $3.98 out. (-0.75%)
Olam $2.89 in, $3.07* out. (+6.2%)

Key Events:
1) Friday was the last trading day of May, where we can see plenty of action from the arbitrageurs covering their arbitrage positions, and also fund managers dressing of their funds. Prices for many counters were in a disarray in the early morning session.

2) As discussed on Thursday night, NOL is a BUY upon breakout of $3.91. As it was arbitrage day, I did not enter when it gapped up to $3.95 on opening. It was until a break above $4 that I decided to jump in. It turned soft shortly after, and I cut it off immediately. NOL fell to a low of $3.87 after that before recovering some ground. It was still trading at $3.98 near the close, but gapped up to close at high of $4.06 on amazing volume.

3) Olam opened down at 38.2% fibo support at $2.87 and went into a sell off. Luckily it did not trigger my cut loss at next support below $2.80. Subsequently, it broke the $2.95 resistance and went on to test the $3.08 recent high. Sold off all my lots at an average price of $3.07. A very decent gain in 2 days!

Evaluation:
Trading on a gap up is always a high risk trade, as the entry price would not be in your favour. Excercise caution when entering into such a trade. If the price go against you, be prepared to cut it quick to keep losses small. Still learning, but I'm pleased with myself for being this disciplined on NOL.

Also, a different approach for Olam that's worth a ponder. Since Olam were in a selldown on opening, I can think about adding on to my positions when it start to show strength again. A break above $2.87 level could mean a possible entry, but a better assured entry would be a break above the previous day's high of $2.93 or a break above resistance $2.95.
____________________________________________________________
So, it's bye bye to May, and hello June! Happy trading to all! Huat ah!

Time for Olam run?

2008-05-29T20:17:00.007+08:00

Took Olam upon breakout of $2.87 today.

Observation: Olam started its recent slump from it's high on 7th May and finally brokedown from it's primary uptrend channel on 14th May. However, it broke out of its short-term downtrend when it gapped up on opening yesterday. It closed just on the support line, and confirmed the breakout with the white candle formed today.

Stochastics showed a crossover on 27th May, and the short term MACD (9,5,3) showed likewise. There was also a 3-bar breakout on that same day. All these pointed to a long position yesterday.

My usual MACD (14,7,5) crossed zero today, confirming the breakout.

Plan: Will look for breakout of immediate Fibo 23.6% resistance at $2.95. A break above it will see it test its recent high of $3.08 on 7th May. Cut loss will be set at below 50% Fibo at $2.80. Profit taking will be assessed upon market sentiment.

Possible trades to look at:
Noble upon breakout @ $2.38.
NOL if it clears $3.91.

Eventful Week.

2008-05-23T22:15:00.003+08:00

It was an eventful week of trading for me, despite it being a 4-day week. Closed out most of my positions by today, ahead of the Existing Home Sales data from US tonight.

Trades Done:
Midas $1.09 in, $1.01 out. (-7.3%)
IndoAgri $2.51 in, $2.44 out. (-2.79%)
IndoAgri $2.49 in, $2.50 out. (+0.4%)
KS Energy $2.01 in, $2.19 out. (+8.96%)
China Hongx $0.655 in, $0.635 out. (-3.05%)
Banjoo $0.07 in.

Key Events:
1) Took too long to cut my loss on MIDAS when I had initially planned to cut it just below $1.04.

2) Market fast selldown caused IndoAgri to turn from profit into loss. Hesistated to cut when it falls below my cut loss level of $2.48. The fast selldown also came unexpectedly and I wasn't fast and decisive enough to react.

3) Narrowly missed out on cashing in on Hongx at $0.66 when I felt the market turning down. Delay in selling immediately then caused me to eventually cut loss at $0.635. The small position I took on the counter also made me negligent.

Evaluation:
With all the reminders that I drilled into my head, I realised that I'm still not disciplined enough to execute the trade promptly. I am also not decisive enough when the market suddenly turns against me. Maybe I should consider putting up a Stop Order if I'm unable to watch the market.

Negligence is another killer blow. A small position is also a position! I should not let these eat up my profits in my winning trades!
______________________________________________________________
By the way, do open up the comments page at the bottom of each post, as I will update my actions in it.

Entry on KS Energy and IndoAgri.

2008-05-21T20:04:00.009+08:00

I entered KS Energy at $2.01 and IndoAgri at $2.51 this afternoon when HSI reopened strongly after a bearish morning session.

Observation: KS Energy broke out of its Bolliger Band on 16th May, and closed at Fibonacci 61.8% resistance today. MACD histogram shows a steady rise. It is also testing the 100-day moving average at this level. A break above this level would be considered bullish, while $2.01 (16th May's close) offer temporary support.

Plan: Will look to ride the trend if it breaks resistance. Profit taking will depend very much on the market sentiment. Will set stop just below support level $2.01.

Observation: IndoAgri broke past Fibonacci 50% resistance at $2.48, which also happened to be Ichimoku's 'cloud' resistance level. Seen as a bullish sign. Will look to test next Fibonacci resistance at $2.65, which is a tough level to clear as seen on 16th and 17th April.

Plan: Will see if it can clear resistance at $2.65. Stop loss set just below support level $2.48.

Other trades:
Took a small punt in Banjoo at $0.07 this morning after seeing the volume build up. I suppose an occasional small punt doesn't hurt?

Cut loss on MIDAS at $1.02 as planned when support $1.04 clearly failed to hold. MIDAS closed $1.01.

A Week of Missed Opportunities.

2008-05-17T11:11:00.003+08:00

Earlier in the week (Tuesday close), I called to watch for 3 counters. KS Energy, Kep Corp and Wilmar.

KS Energy opened $1.76 on Wednesday (13th May), retraced to 1.72 before Thursday's results, and upon good results ran up to close at $2.01 on Friday.

Kep Corp opened $11.18, fell to $11, before embarking on a super bull run to close at $11.80 on Friday.

Wilmar opened $5.10 on Wednesday, dropped to a low of $4.93, before closing at $5.11 on Friday.

Missed all of them, especially Kep Corp when I missed my planned entry at $11. Order didn't get done, and it ran away and never looked back. Also, I've been monitoring KS Energy for awhile now, but just didn't get in when it broke out. Thinking back, I wonder what had stopped me then. Can only rue on my lack of action.

And when I finally decided to take action to compensate for my missed opporunities, I got into MIDAS at $1.09 yesterday. It turned out to be a false break. MIDAS turned down to close at $1.05. I will look to cut on Tuesday if support level $1.04 doesn't hold.

Forex side, scalped EURGBP for 4 pips on Wednesday. Nothing fantastic to boast about.

U-turn for Singtel?

2008-05-11T20:55:00.012+08:00

Singtel has been trading in an estimated range between $3.60 and $4.00 for months (since last September).

It has been trending down in this range since 11th April when my 2 moving averages cut over. Parabolic SAR (a laggard indicator) shows bearish since 18th April. What's interesting to note is that a Hammer was formed last Friday 9th May. It fell to the day's low of $3.65, before rebounding strongly in the last 30 minutes of trading to close at $3.71. The Stochastics showed signs of cutting above 20% oversold level, and the short-term MACD histrogram (9,5,3) showed positive sign.

Could this be the start of a bullish reversal? A confirmation is needed. Should it really be a bullish reversal, Monday should see Singtel open and move upwards. Else, this candlestick pattern would be deemed invalid.

My Virgin Trade!

2008-05-05T18:53:00.006+08:00

I finally did my virgin trade on my new (low comm) account today. Bought Yangzijiang at $1.15.

Reason: Broke out of resistance at $1.14 (formed on 28th April) on relative good volume. The MACD histrogram shows bullishness too.

Plan: Will monitor Fibonacci 61.8% level at $1.21 to see if it holds. Will cut loss if it falls below Fibo 50% level at $.1.13. Note that the RSI is in overbought. Will be quick to cut if it cuts below 70%.

Microsoft Withdraws Offer for Yahoo!

2008-05-04T09:50:00.006+08:00

Microsoft had withdrawn its $47.5 billion proposal to acquire Yahoo!. Expect Yahoo!'s share price to plunge on Monday when trading resumes.

Read more on the news here.

Market preview for Monday: Upon Friday's non-farm payroll beyond analysts' expectations, DOW started the session strongly. But it later gave up 3-digits gain in early session, and even traded in the RED for some time. It managed to close +48pts at 13058. DOW futures closed 13125 (+65pts). However, with Microsoft's withdrawal on Yahoo!, expect the Nasdaq to be affected when trading resumes on Monday.

On the local scene, chartwise, many counters are looking bullish. But I'll be looking to enter cautiously. Jardine C&C looks good to me. So is Ezion.

SGX - Three Outside Down?

2008-05-02T12:09:00.007+08:00

Plan: I discovered a "Three Outside Down" candlestick formation formed on SGX on 29th April '08. Moreover, there's a bearish cut-over on the Stochastics and MACD. Since all these point to bearish signs, I planned was to short it on the next day.

Action: On 30th April morning, I shorted it at $8.59 (13 cents up from previous day's close of $8.46), only to see it hit my cut loss point at $8.71. It later moved up to $8.73 before tumbling all the way down to the day's low of $8.48. It later recovered to close at $8.59, my short price. *Faintz*

Evaluation: Despite bearish signs hanging over it, SGX seemed to be bullish on the day with alot of big Buy-Ups. I can only be happy that I'm disciplined enough to cut my losses, as it opened gap up at $9.10 today, following DOW's 189pt rally to close at 13010 last night! At the time of this post, SGX is priced at $9.15. A narrow escape!

Possible future action: SGX is testing 61.8% fibonacci level at $9.16. And with US non-farm payroll coming out tonight, it remains to see if DOW can hold above the 13000 resistance level. A possible short on SGX at this level?

Welcome!!

2008-05-01T19:37:00.000+08:00

Welcome to Traders Connection!

I decided to start this blog to post my trading ideas. Cos I believe it's through this sharing of ideas that can make us a better trader.

It's always good to document our inital thoughts and strategies, and evaluate on the actions taken at the end of the day.

I believe this blog will serve as a good diary for me (and you) in the future.

Here, I welcome all to share your thoughts with me, and may we all grow together as successful professional traders!